II 

118TH CONGRESS 

2D SESSION S. 5174 

To amend the Employee Retirement Income Security Act of 1974 to clarify 

the criteria by which fiduciary responsibility is exercised in protecting 

shareholder rights. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 25, 2024 

Mr. CASSIDY introduced the following bill; which was read twice and referred 

to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To amend the Employee Retirement Income Security Act 

of 1974 to clarify the criteria by which fiduciary responsibility is exercised in protecting shareholder rights. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Restoring Integrity 

5 in Fiduciary Duty Act’’. 

6 SEC. 2. EXERCISE OF FIDUCIARY DUTY. 

7 (a) IN GENERAL.—Section 404(a) of the Employee 

8 Retirement Income Security Act of 1974 (29 U.S.C. 

9 1104(a)), is amended by adding at the end the following: 


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1 ‘‘(3) INVESTMENTS BASED ON PECUNIARY FAC2 TORS.— 

3 ‘‘(A) IN GENERAL.—For the purposes of 

4 paragraph (1), a fiduciary— 

5 ‘‘(i) may evaluate an investment or in6 vestment course of action based only on 

7 pecuniary factors, except as provided in 

8 subparagraph (B); 

9 ‘‘(ii) may not subordinate the inter10 ests of the participants and beneficiaries in 

11 their retirement income or financial bene12 fits under the plan to other objectives; 

13 ‘‘(iii) may not sacrifice investment re14 turn or take on additional investment risk 

15 to promote nonpecuniary benefits or goals; 

16 and 

17 ‘‘(iv) shall weight each pecuniary fac18 tor in a manner that appropriately reflects 

19 a prudent assessment of the impact of the 

20 factor on risk and return. 

21 ‘‘(B) USE OF NONPECUNIARY FACTORS

22 FOR INVESTMENT ALTERNATIVES.—Notwith23 standing subparagraph (A), when choosing be24 tween or among investment alternatives, if a fi25 duciary is unable to distinguish between or 


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1 among investment alternatives or investment 

2 courses of action on the basis of pecuniary fac3 tors alone, the fiduciary shall use the capita aut 

4 navia standard as the deciding factor in the in5 vestment decision, provided that— 

6 ‘‘(i) the fiduciary documents detail— 

7 ‘‘(I) why pecuniary factors were 

8 not sufficient to select the investment 

9 or investment course of action; 

10 ‘‘(II) how the selected investment 

11 compares to the alternative invest12 ments with regard to the composition 

13 of the portfolio with regard to diver14 sification, the liquidity, current return 

15 of the portfolio relative to the antici16 pated cash flow requirements of the 

17 plan, and the projected return of the 

18 portfolio relative to the funding objec19 tives of the plan; and 

20 ‘‘(III) how the selected invest21 ment is consistent with the interests 

22 of the participants and beneficiaries in 

23 their retirement income or financial 

24 benefits under the plan; and 


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1 ‘‘(ii) the fiduciary demonstrates that 

2 it did not expend any resources during the 

3 investment course of action on nonpecu4 niary factors that place weight between or 

5 among investment alternatives for the pur6 pose of the investment decision. 

7 ‘‘(C) INVESTMENT ALTERNATIVES FOR

8 PARTICIPANT-DIRECTED INDIVIDUAL ACCOUNT

9 PLANS.—In selecting or retaining investment 

10 options for a pension plan described in sub11 section (c)(1)(A), a fiduciary may consider, se12 lect, or retain an investment option on the basis 

13 that such investment option promotes, seeks, or 

14 supports 1 or more nonpecuniary benefits or 

15 goals, only if— 

16 ‘‘(i) the fiduciary satisfies the require17 ments of paragraph (1) and subparagraphs 

18 (A) and (B) of this paragraph in selecting 

19 or retaining any such investment option; 

20 and 

21 ‘‘(ii) such investment option is not 

22 added or retained as, or included as a com23 ponent of, a default investment described 

24 in subsection (c)(5) (or any other default 

25 investment alternative). 


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1 ‘‘(D) DEFINITIONS.—For the purposes of 

2 this paragraph: 

3 ‘‘(i) CAPITA AUT NAVIA.—The term 

4 ‘capita aut navia’ means a standard by 

5 which a fiduciary chooses at random be6 tween or among investment alternatives 

7 where pecuniary factors are equal and does 

8 not give added weight to 1 investment or 

9 another, provided that the investment al10 ternatives have identical risk and return 

11 attributes and choosing among the invest12 ment alternatives would have compara13 tively negligible impact, not considering li14 quidity constraints or transaction costs. 

15 ‘‘(ii) INVESTMENT COURSE OF AC16 TION.—The term ‘investment course of ac17 tion’ means any series or program of in18 vestments or actions related to a fidu19 ciary’s performance of the fiduciary’s in20 vestment duties, and includes the selection 

21 of an investment fund as a plan invest22 ment, or in the case of a plan described in 

23 subsection (c)(1)(A), a designated invest24 ment alternative under the plan. 


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1 ‘‘(iii) MATERIAL.—The term ‘mate2 rial,’ when used to qualify a financial risk 

3 or financial return— 

4 ‘‘(I) means a financial risk or fi5 nancial return in which there is a sub6 stantial likelihood that a reasonable 

7 investor would attach importance 

8 when— 

9 ‘‘(aa) evaluating the poten10 tial financial risks or returns of 

11 an existing or prospective invest12 ment; or 

13 ‘‘(bb) exercising, or declining 

14 to exercise, any rights with re15 spect to securities; and 

16 ‘‘(II) does not include furthering 

17 nonpecuniary, environmental, social, 

18 political, ideological, or other goals or 

19 objectives. 

20 ‘‘(iv) PECUNIARY FACTOR.—The term 

21 ‘pecuniary factor’ means a factor that a fi22 duciary prudently determines is expected 

23 to have a material effect on the risk or re24 turn of an investment based on appro25 priate investment horizons consistent with 


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1 the plan’s investment objectives and the 

2 funding policy established pursuant to sec3 tion 402(b)(1).’’. 

4 (b) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to actions taken by a fiduciary on 

6 or after the date that is 1 year after the date of enactment 

7 of this Act. 

Æ 


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